After the biggest economic recession in Latin American history, there are signs that Venezuela could eventually turn into a corner.
According to some economists, The decision of the socialist government Encourage currency loosening, relaxation of import bans and informal dollarisation have breathed life into an economy that has shrunk by about 75 percent since 2013.
The change of government in the White House has also raised hopes that a Solutions can be found Towards a long-running political stalemate in the country, which could ease U.S. sanctions and consequently further reconsider it.
Credit Suisse recently predicted that Venezuela’s economy would expand by 4 percent this year, the first year of growth since 2013. The bank acknowledged that this was partly due to the resumption of economic activities after being hit by last year’s coronavirus epidemic. But it’s “not the whole story”.
Alberto Rojas, chief economist at the Bank of Venezuela, wrote in a note addressed to customers, “The recovery in domestic demand, which we have been observing for a long time, is becoming more apparent in the data.”
“Simplifying and widespread use of foreign exchange in day-to-day transactions has renewed economic activity – albeit slightly.”
Rojas has forecast another three percent growth in 2022. “In our view, this year’s increase is not just a dead cat bounce,” he wrote.
In Caracas, people suspected that this was some kind of meaningful recovery. According to the IMF, Venezuela’s per capita GDP fell by a staggering 87 percent compared to the previous decade, from ১২ 12,200 a year in 2011 to now. It stands at ৫ 1,540. For the first time, the average Venezuelan is poorer than the average Haitian.
“Once you’ve gotten so low, you’re finally going to have to make some adjustments,” said Adon Cellis, president of the Venezuelan Manufacturers’ Association Conindustria. “The government has introduced some anarchic measures of economic flexibility and it has given us a small amount of oxygen but structural problems still remain.”
But a handful of other banks and consultants also expect output to increase. Two Venezuelan consultants, AGPV and Denimika Venezuela, have forecast growth of 1.9 percent and 2.3 percent, respectively, this year.
The UK-based Oxford Economics forecast growth of 0.2 per cent this year, up 13.1 per cent the following year, although it emphasized the need to look at the recovery.
“It follows two consecutive years [2019 and 2020] When GDP falls by a third or more, “said Marcos Casarin, chief Latin American economist at O’Neill. . “
For every economist to predict development, there are many who said that Venezuela would suffer even more before it finally improved.
Focus Economics, a provider of economic sensing forecasts, recently received 21 banks and consultations for their views on Venezuela. Concom said GDP was down 3.1 percent this year and will return 2.7 percent next year. The IMF has forecast a contraction of 10 percent this year and the next five percent.
The huge discrepancy between the forecasts reflects the consequences of the epidemic, the impact of the rollout of the Covid-19 vaccine, and the uncertainty about the timing and future of the sanctions.
“Under the Biden administration, U.S. sanctions remain the key determinant of the evolutionary outlook,” writes Stephen Vogado, an economist at Focus Economics.
The Prohibition Ban Venezuela from selling oil to the United States and make it harder for it to export elsewhere, even though the government has found a way to take action. Venezuela’s oil exports have risen slightly in each of the past five months, hitting a 10-month high in March – although they are still weak compared to historical highs.
Oil has become the backbone of Venezuela’s economy over the past century, with the country producing significant quantities of cocoa, coffee and rice. It boasted a textile industry and produced chemicals, cement, steel and aluminum. Most of those industries have been destroyed in the last two decades of revolutionary socialist rule.
A store selling car accessories at a petrol station in the Las Mercedes neighborhood of Caracas, store manager Alfredo Barrera said. Informal dollarization A few years after hyperinflation brought price stability somewhat.
“The economy has adapted to the country’s problems,” he said. “Right now, it’s okay to talk about comparative stability in terms of currency, but we’re far from seeing real improvement.”
In La Alcantina, Douglas Palancia, manager of a bakery that has been in business for more than 30 years, said sales were hit hard by the epidemic. The shop windows, usually full of cakes and pastries, were empty. “I don’t have big expectations for this year,” he said.